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MTU is the maximum packet size (in bytes) that can be transported reliably across any particular network, specifically an IP Ethernet network for this discussion.
The maximum size of an IP Ethernet packet is 1500, but several variables usually require a packet size that is less. For instance the largest MTU possible for PPPoE connectivity is 1492 because of an 8 byte PPPoE header. Other applications such as VPNs, SSH1, and L2TP may add additional overhead that would require a smaller MTU. It is very important to set the correct size. Too large an MTU will require fragmenting a single packet into two separate packets; too small loses transmission efficiency.
To find your optimum setting please reference this MTU FAQ.
Andy Houtz DSL